DA labels latest SAA bailout ‘indefensible’
The Democratic Alliance (DA) has described as indefensible the latest bailout given to South African Airways (SAA).
Finance Minister Tito Mboweni announced during his budget speech in the National Assembly on Wednesday that the ailing national carrier would receive an additional R16 billion to settle guaranteed debt and interest.
SAA has been placed under business rescue, with Mboweni reiterating that it will lead to a radically restructured airline.
But the DA’s Geordin Hill-Lewis says while the minister talks tough on struggling state-owned enterprises, he always ends up with his hands even deeper in his pockets.
“That is not a good decision and we don’t welcome that. The government should not be in the airline business and SAA should be sold off. It was a bad decision and the bailout money was supposed to be put into education, healthcare and police budget but now it’s all being paid into SAA. It is not right.”
The official opposition welcomed the move by Mboweni to tighten government spending, including a major cut to public sector wages.
Hill-Lewis warns however that there is no guarantee that the minister will deliver the proposed cut of R160 million over the next three years.
“The minister done the right thing by committing to a big wage cut but of course he didn’t negotiate with the unions yet, there is no guarantee at all that he’d be actually be able to deliver the R160 billion that he spoke about today. If he doesn’t deliver it, then our debt situation becomes really bad.
“There is a big credibility question around that issue of the budget because the number was included in the budget before it was negotiated,” he adds.